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Tom Baigrie: The FCA is standing in the way of innovation

Let’s say you had a phone-based financial advice service that had been growing quietly for 15 years. Let’s say your business now had more than 100 advisers giving advice daily in one focused area of consumer need.

And let’s say you genuinely felt that what your business did for the 3,000 or so people a week who engaged with it was good for those people, resulting in you harbouring ambitions to diversify into other areas requiring the application of skill and experience in simplifying complex things for consumers.

I bet if that was you, you would have seen the last Budget as a huge opportunity to serve the burgeoning pre-retirement demographic in the same style you did elsewhere – especially if you had stayed out of the annuities market because, like PPI and endowments before it, you thought the product was wrong for far more people than it was right.

You would look at the new need for good advice the Chancellor promised to serve and see a chance to build your business.

But I can tell you with confidence that just about now, despite the relative ease with which you could take the opportunity, you would put that dream so far back in the cupboard it might as well be in Narnia.

History lesson

Why do I know this, you ask. Because you would have been listening to all the pronouncements about the new opportunity from your regulator and you would compare their words with those of their predecessors when they too encouraged markets – on personal pensions, mortgages with endowments or even suggesting PPI should be compulsory.

You would note the current policymakers know little of those histories and deduce they probably would not learn from the grievous errors their equivalents made back then – the ones that brought an entire industry into disrepute.

You would spot that no one on the governing side of the industry ever took any responsibility – personal, corporate or collective – for that long-term, ongoing and hugely destructive failure; that, instead, they thought you and your kind might take this new opportunity as “a charter for either misselling or abdicating responsibility” and consumers were better off with the “impossible feats of forecasting and accuracy” computers are capable of.

You might then think to yourself, have these good people learned nothing?

Do they not know that in personal finance, what is right today is hardly ever right for very long and so all advice needs to be managed and adjusted over the years if it is to have any chance of remaining good?

You would wonder if you could trust such people, and then you would just sling the whole thing out and let them get on with their naive nonsense – without you.

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18th December 201812:39 pm

Comments

There are 9 comments at the moment, we would love to hear your opinion too.

I particularly like this paragraph -: “Do they not know that in personal finance, what is right today is hardly ever right for very long and so all advice needs to be managed and adjusted over the years if it is to have any chance of remaining good?”

If only the decision-makers, the committee monkeys and never-worked-at-a-real-job-in-their-lives theorists could spend a few weeks running a real business where personal responsibility is implicit, rewards are often illusory and annual 30% bonuses for failure are mere pipedreams.

I happened to be watching Question Time last night (doesn’t happen very often as the wife doesn’t like it and i gave up control of the remote as part of our vows) and one of the audience’s comments hit home for me. It wasn’t about the financial services industry but it could very well have been.

The topic was the impending teachers strike. The particular comment that struck me was why does Michael Gove insist he knows better than the thousands of teachers that work in schools day in day out and why aren’t these teachers consulted when changes to education policy are implemented.

So this culture of a regulator or, in the case above, a government minister not utilising the greatest knowledge base they have available i.e. those who do the job is not limited to financial services. The FCA has shown time and time again that they are willing to bulldoze through the industries collective opinion and when things go wrong not hesitate to turn around and blame the very industry that warned them in the first place in what has become the worlds strangest case of “I told you so”.

Having been in this industry for a very long time and having up-skilled (their words, not mine) so I could stay in the game (Incidentally, my degree didn’t count as a skill) I never cease to wonder at the so called experts who spout their opinions having never worked anywhere in their lives. A job with a major investment house doesn’t in my eyes prepare you for anything like the understanding needed to survive in the real world. What is the real world I hear you ask? Well my answer to that is; if you need to ask you probably wouldn’t understand.

“You might then think to yourself, have these good people learned nothing?” – I couldn’t have put it any better.

Thought provoking piece Tom which on a positive note (yes half a glass is better than none 🙂 highlights for me how we as advisers have evolved such that we distrust these opportunities for fear of our newly re-clothed regulators will turn on our good intentions again. Maybe, just maybe in a Darwinian move they will in time have to evolve too and realise that overwhelmingly our intentions are good(police the rogues of course but treat us as innocent until proved otherwise) and that we also want their “Good customer outcomes” or as we used to call it great client relationships.

So well said Tom. Is there anyone who was not insulted by Martin Wheatley saying advisers were sitting on their hands post RDR? Could be we are, but that is because we have our hands tied behind our backs, feet in chains and when you are pushed that is what happens.

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